Declaration of Conformity 2012 by the Executive Board and the Supervisory Board of Wacker Chemie AG
1. General Declaration Pursuant to § 161 German Stock Corporation Act
In December 2011, the Executive Board and the Supervisory Board of Wacker Chemie AG issued their last declaration of conformity pursuant to Section 161 of the German Stock Corporation Act. Since that time, Wacker Chemie AG has complied with the recommendations of the German Corporate Governance Code (the Code) in the version dated May 26, 2010, with the following ex-ceptions, and will continue to comply with the recommendations of the Code in the ver-sion dated May 15, 2012 except as follows:
a) D&O Insurance Deductible for Supervisory Board Members
German law and a company’s Articles of Association set clear limits in regards to the Supervisory Board’s ability to exert influence on the business activities of a stock corporation. Pursuant to Section 76 (1) of the German Stock Corporation Act, an Executive Board is responsible for independently managing the corporation. A Supervisory Board is instrumental in defining the main features of corporate strat-egy. However, beyond this contribution, the Supervisory Board’s abilities are lim-ited in terms of influencing the implementation of corporate strategy or operative business. The same applies to measures taken to avert damage or loss to the company. Since the Supervisory Board members receive a relatively low repre-sentation allowance when compared to the Executive Board members’ compensa-tion, we do not deem the agreement of a deductible reasonable for members of the Supervisory Board.
b) Severance pay cap
We will comply with this recommendation of the Code on new appointments to the Executive Board, as well as the re-appointment of Executive Board members.
c) Appropriate consideration of women for the appointment to the Executive Board
The considerable importance that Wacker Chemie AG attaches to diversity ex-tends to Executive Board membership. Nonetheless, expertise – including experi-ence gained abroad – and qualifications are the key criteria here. For this reason, we do not consider it expedient to prioritize “the aim of appropriate representation of women” over expertise and qualifications.
d) Formation of a Nomination Committee within the Supervisory Board
The Supervisory Board is to establish a Nomination Committee that is exclusively composed of shareholder representatives and whose task it is to make recom-mendations to the Supervisory Board with regard to suitable candidates for pro-posal to the Annual Shareholders’ Meeting.
We do not comply with this recommendation because, in view of our shareholder structure, we do not believe that the formation of such a committee is appropriate. Due to the majority situation, nominations to the Supervisory Board must be agreed with the majority shareholder in any case, so that an additional nomination committee would not serve to increase efficiency.
e) Announcement of Proposed Candidates for the Chair of the Supervisory Board to the Shareholders
According to this recommendation, shareholders shall be informed of any candi-dates for the Supervisory Board chair even though, as a rule, the Supervisory Board has not yet been appointed. Under German law, the Supervisory Board chair must be elected by, and from among, the Supervisory Board members. There is no legal requirement to announce the candidates for the chair from among a yet-to-be-appointed group of Supervisory Board members. Furthermore, this would result in a de facto predetermination, which is also not provided for under German law. For these reasons, we do not comply with this recommendation.
f) Performance-Oriented Compensation for Supervisory Board Members
The Code as amended on May 26, 2010 provided for the Supervisory Board members to receive a performance-oriented component in addition to their fixed compensation. We did not comply with this recommendation. However, since the Code in the version dated May 15, 2012 no longer includes the recommendation on a performance-oriented component, Wacker Chemie AG has since that date complied with this recommendation of the Code.
g) Defining Concrete Objectives Regarding the Number of Independent Mem-bers of the Supervisory Board
The Supervisory Board of Wacker Chemie AG, as it is composed at present, meets the requirements of the Code regarding an adequate number of independent members. The Supervisory Board will continue to ensure that in future elections, a number of independent candidates, which it considers to be adequate, will be recommended to the shareholders. Additionally defining a concrete objective in this regard would not only limit the choice of suitable candidates for the Supervisory Board, but also restrict the shareholders’ right to elect those Supervisory Board members whom they consider to be the most suitable. For these reasons, we do not comply with this recommendation.
Munich, December 12, 2012